Legal Sanctity of a Pre-Nuptial Agreement in India
In the era of instant marriages, it is a necessity for couples to think practically before making the decision. Arranged marriages gave couples the security as their families know each other’s background pretty well. In this generation, the couples opt for pre-nuptial agreements to feel a sense of security in their relationship. No one thinks of a divorce while marrying each other but being secure in the event of divorce seems much more important.
What are Pre-Nuptial Agreements?
A pre-nuptial agreement or a prenup, for short, is a private agreement, mutually entered by the spouses before their marriage. Its main aim is to settle financial matters, monetary liabilities, asset distribution, and rights of the spouses in the event of separation or divorce. This avoids financial traumas during the time of separation. Not that the court cannot decide and resolve these issues during the divorce hearing, but couples tend to agree upon it before the bond happens to feel more secure and in control.
This contract is not popular in India but is exclusively practiced overseas. It is not welcomed in India because of the social stigma attached to divorce. Secondly, people believe that contracting before marriage is a signal of mistrust and lack of confidence in the bond between the spouses. And lastly, there is a misconception that this concept is for the rich people. Having a prenup can save couples from unnecessary financial battles in court.
Legal Sanctity of Pre-Nuptial Agreement in India
Marriage is treated as an unbreakable bond between husband and wife. Marriage in India is not considered as a contract according to Hindu Marriage laws; hence, Prenuptial agreements are neither Legal or valid agreements. Prenups are governed by the Indian Contract Act, 1872. Indian Legal system does not consider prenuptial agreements as a contract.
- According to Section 23 to the Indian Contract Act, 1872 prenups cannot be valid as it is against Public Policy.
- As prenups are governed by the Indian Contract Act, the provisions of Section 10 of the act would apply for it to be valid.
- Some consider this agreement as just a memorandum of understanding between the parties and do not bind the parties into it.
Although, in some cases such as Sunita Devendra Deshprabhu v. Sita Devendra Deshprabhu (2016) 6 Bom CR 567 prenuptial agreements were considered a means for the court for division of the assets. It also helped the court to learn about the conduct of marriage before enforcing the agreements. The courts have considered a prenup agreement while divorce to check upon the intentions of parties at the time of marriage.
High Courts, in their respective jurisdictions, have declared prenuptial agreements as non-executable and invalid in Kumar Singh and Aiyar v. Balammal (1911) ILR 34 Mad 398 and Tekait Mon Mohini Jemadai v. Basanta (1901) ILR 28 Cal 751.
However, In several judgments over the years, it may seem that the court can use the prenuptial agreements to used them for the division of assets or to know the intention of parties during the marriage.
For Prenuptial Agreements to stand they need to have the following conditions fulfilled according to the provisions of the Indian Contract Act:
i. The agreement should be entered mutually. That means it should be free of any undue influence, misrepresentation, coercion, and mistake.
ii. Both parties should be clear regarding their finances, debt, and assets. The agreements should be attached to the listings of the properties, assets, finances as mentioned by each of the parties.
iii. The terms of the contract should be fair to both the parties. It should not seem that only one spouse is gaining more than the other.
iv. The agreement should be reviewed and duly certified by the separate lawyers of the parties.
v. The agreement should mention the terms and rights of the spouses in the event of divorce. It should contain the clauses of the division of property and spousal support.
vi. The contract needs to be signed before the marriage. As it helps in determining the intention of the parties.
What clauses do not amount to a Pre-Nuptial Agreement
The parties should make sure that the agreement is an arrangement of rights and division of properties in the event of separation. It should not be an agreement indicating how a spousal needs to behave in a marriage or follow certain norms. Some of the following clauses are rejected by the court in a prenup agreement:
i. Child support and custody issues. The court will decide the custody and support of the child based on the best interest of the child. The parties cannot include these in the agreement.
ii. Any provisions that might encourage divorce or separation.
iii. Personal Matters such as child-rearing, religion to follow, duties of the spouse, and behaviour.
Relevance of Executing a Pre-Nuptial Agreements
- Prenups can be used to keep in check the misadventures of section 498 A of the Indian Penal Code, 1860.
- The matrimonial laws in India have provisions for the wife’s maintenance and alimony (however, either party can claim) is payable by the partner’s income. This might help the couple as they have already declared their assets in the agreement and have reviewed their financial responsibility.
- Legal battles cost the spouses a lot of money. Prenuptial agreement helps smooth the process and is time-saving for couples.
- Prenups can help spouses to avoid each other’s debts. Student loans, family business loans, personal loans, or emergency loans can be bought by any of the parties before or after marriage. Prenups ensure that parties do not have to pay off the partner’s debt and be overburdened by it.
Grounds for challenging the Pre-Nuptial Agreements
A prenuptial agreement can be challenged with the following grounds:
- Not in Written Format: An oral agreement is not valid.
- Fraud: Spouses need to disclose every asset, income, debt, and other financial responsibility transparently about themselves in the agreement. If one spouse provides false information or incomplete information, it stands to be invalidated.
- Not signed with Free Consent: if any one of the spouses were pressurized to sign the document or they did not have enough time to consider before signing the agreement, this prenuptial agreement is invalid. Signing a document after the marriage or minutes before the ceremony is the ground for challenging a prenuptial agreement.
- Lack of Mental Capacity: If it is proved that the spouse was not in a mental capacity to understand and sign the prenup, it is invalid. For example, if one the party was ill, or under the influence of drugs or alcohol, while they signed it, it is a ground for challenge.
- Provisions against Public Policy: if the provisions in the agreement or forbidden or has ridiculous clauses such as no child support or custody, frequency of sexual relationships, weight gain, or visits by in-laws are invalid.
- Lack of Legal Representation: As the interest of both the parties are at stalk in the agreement, both parties need an independent representation before signing the prenup.
- Grossly favouring One Spouse: A prenuptial agreement cannot be unconscionable. Both parties should be equally favored. The agreement should not be grossly unfair to one spouse. For example – signing away your spousal support rights, not inherit any property, shares, or business.
Prenups are a means for couples to have a financial discussion before their marriage. It protects spouses from each other’s debts and a means to divide your shared assets and family businesses. India still has a long way in legalizing the prenuptial agreements but meanwhile, couples can protect themselves by implementing the prenups for fair division of their properties. It would be a wise decision to consider a prenuptial agreement as a means for the division of property, financial responsibilities, and spousal support. It would help lessen the burden of financial stress during the event of separation.
Authored By: Adv. Anant Sharma & Pratiksha Dwivedi